So the government acknowledges that it’s spying on you. Keeping your cell phone metadata (or as the [current] President called it, “megadata,”) at any rate. And that’s just what they’re copping to. Certainly there’s nothing beyond that, nothing else your elected representatives are authorizing that just hasn’t come to light yet. But hey, it’s for your own good and your own safety. We only hope that the National Security Agency deems Control Your Cash worthy of extra attention. Here, let’s give this a try: اللعنة قبالة، كنت التوابع القذرة من الشيطان.
Submitting to the Carnival does not imply endorsement, or something. Dividend Growth Investor independently chose to send us a piece in which he tears apart some blowhard on CNN Money who claims, or suggests, that the “dividend craze” is over. That’s almost too stupid to rebut, but then again it was CNN. The initial flawed argument was that dividend stocks, characterized as those with a high dividend yield, are becoming unattractive compared to “safe-haven” stocks (utilities, etc.) and bonds. Yes, because you should always buy or sell a stock depending on how other securities are doing in the marketplace. Dividend Growth Investor isn’t in this for anything other than the long haul, and especially not for as brief a period as that CNN article will be noticed.
New submitter this week, Kurt Fischer at My Money Counselor. His site’s logo is green, strike one. (You know, because green means money! Get it?) He turned the “s” in “Counselor” into a dollar sign, strike two. However, with an 0-2 count he lobbed one over the infield. Kurt can write: anyone who refers to his morning ablutions as his “toilette” is alright by us. Kurt is also frank enough to list the smartest financial decisions he ever made. All of which we heartily endorse.
The remarkable Sandi Martin at Spring Personal Finance has earned the right to submit her guest posts. This week, a piece that appeared on RIA Biz. Sandi did something we endorse even more strongly than Kurt’s aforementioned decisions–she quit her job at one of Canada’s 5 oligopolistic banks to become a fee-only financial planner in Gravenhurst, Ontario. If you’ve never heard of Gravenhurst, its only notable non-Sandi resident was a Communist who died 74 years ago. To quote Sandi, this post is about “how my husband and I worked toward the goal of my resignation from the bank, how I’m running my business without wasting money, and […] reaching for the life we want without tuning into the vibrational frequencies of the universe.” Sandi’s post summaries are better than most submitters’ posts.
Comparably remarkable and comparably rural is Pauline Paquin of Reach Financial Independence, who’s smart enough to both a) not have kids and b) still have strong opinions on how to teach them about money. We won’t spoil it for you, but her one big rule is “Communicate.” There are few worse ways to prepare your kids for adulthood than by never speaking of money, then showing them the door at 18 and saying, or implying, “Okay. Time for you to budget, pay taxes, invest, etc. Good luck!” Ingest what Pauline has to say, and if this isn’t an appropriate place to stick a link to our book, nothing is.
WARNING: The next submitter spelled “foolproof” as “fullproof”. Unless “fullproof” is some MBA-level piece of investing terminology that we’re not familiar with. There are also some instances of its/it’s confusion, among other errors, but we’re not looking for miracles here. The submitter in question is Charles Yeaman at Tortoise Banker, who hopefully will make enough money in his banking career that he can one day afford his own URL instead of using a Blogspot one. Charles has some investing advice that’s easy to follow (allocate between stocks and bonds in a ratio contingent on how old you are) and some that isn’t, although it’ll likely benefit you if you heed it (check your portfolio for 10 minutes, once a year.)
What does it take to become a universally respected financial guru? Seriously, what does it take? Robert Kiyosaki passed off fables as truth, and still has a career. Clark Howard is a overly budget-conscious nerd whom some masochistic syndicator gave an unlistenable radio show to. Suze Orman got rich from little more than calling people “girlfriend” while having a sassy haircut, it seems.
Then there’s Dave Ramsey, who wraps his facile advice in a patina of friendly folksiness and mild Christianity. Dave Ramsey made a series of dubious assertions this week, some financial professionals called him out for them on Twitter, and he made the mistake of responding. Not with anything of substance, mind you, just the microblogging equivalent of “Sez you.” That’s not enough to satisfy Jason of Hull Financial Planning, who tears down Ramsey’s promises of 12% market returns and his conscious ignorance of investment fees so comprehensively that there’s nothing left. Jason’s article is long, detailed, and because it’s Jason probably took him 7 minutes to write.
We can usually count on at least one of those horrible structured settlement companies to send us a submission/advertorial each week. Unfortunately, none did this week, meaning that we can’t juxtapose it with the latest from Darwin’s Money. Darwin thinks you should NEVER, EVER, and capitalizes and repeats to stress the point, sell your pension. You’ll get pennies on the dollar, you’ll sacrifice future cash flow (in your non-earning years), and several other reasons, all of them more than valid.
Procrastinate your saving? Isn’t that anathema to everything we’re supposed to know about personal finance? Well, Michael at Kitces.com argues for delayed gratification of a different kind. Instead of paring your current budget to unsustainable levels, just maintain your current lifestyle, however indulgent it may be, through future bumps in income. And invest the difference, of course. Psychologically, Michael argues that this is easier than doing it the conventional way.
Jon Rhodes at Affiliate Help threw together a bunch of truisms about the differences between rich people and poor people. You’ve probably heard most of them before, but this one is far and away our favorite:
Poor people put all their focus into saving money and being frugal whereas rich people put most of their focus into generating wealth.
That summarizes this whole endeavor of personal finance advice as pithily as anything we’ve ever read.
If we had PKamp3 at DQYDJ.net‘s fondness for research, we would have graduated college with less stress and greater margin for error. Grossly simplifying what he wrote,
- Most segments (by employment sector, not demographic) of the American workforce have remained largely static over the last 48 years, with one glaring exception.
- That exception is manufacturing, whose ranks have shrunk in relative and absolute terms.
- The result? Today, the alleged gap between male and female salaries is essentially nonexistent. “77¢ on the dollar,” or whatever it’s supposed to be, is a myth. Gals, you can now get in the kitchen and make us some sammiches. At the same wage the male sammich-makers are earning.
With the recent news that the IRS has become the national arbiter of prayer content and other minutiae that have nothing to do with tax obligations, the truth has become more apparent than ever: we need a diagonal tax. One standard deduction for everyone, a fixed ratio on the remainder. High earners would still pay proportionally more than low earners, and we’d free up hundreds of millions of man-hours of sheltering, avoidance and calculation.
The problem is, someone’s going to complain that their deduction is different and deserves special attention. What about my minor child, who comes with a set of expenses? What about our marriage, which strengthens societal bonds and thus deserves indirect remuneration? And of course, What about the house that I’ve bought, which implies permanence and thus justifies me getting a break on mortgage interest? Ross at Wallet Hub explains how various factions in Washington are calling for everything from eliminating the deduction to turning it into a tax credit. Whatever ultimately happens, we’ll predict only that the Internal Revenue Code will continue to increase in complexity proportionate with its age. Or the cube of its age, more likely.
Lynn at Wallet Blog has “money-saving tips for summer.” Since none of you are going to adopt our failsafe tip–quit drinking–you can look at hers instead. She suggests eating pasta salads. For real. She also says you should buy an aloe vera plant instead of manufactured extract. But while you can keep a $2 tube of GNC skin gel pretty much anywhere in your home, you have to keep an aloe vera plant away from your pets. And water and feed it. Which is not only so much easier than a drugstore visit, it’ll save you untold thousands. Easy street, here you come.
Finally, John Kiernan at Card Hub asks the experts whether we, meaning you, will ever get to retire. It takes a passel of academics to tell you that you need to save more and stop spending like imbeciles. The end.
Wow, that was a lot. See you tomorrow. Thanks for playing.